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with it you may have before you not only the official view but also the popular aspects of it, and that you may be able to understand the connection which undoubtedly exists between this special question and the general financial condition of the Colony, and the repeated efforts unavailingly made for some time past by the Unofficial Members to get from the Colonial Government an independent examination into the steady and constant increase in the aggregate cost of the administration of the Government, which we regard as exceptionally heavy if not excessive.
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In 1888 and 1889 this Colony was undoubtedly, so far as appearances went, in a very prosperous condition, and there was no reason to anticipate any serious alteration in its financial position in the immediate future. We need not do more than refer your Lordship, in proof of this, to Sir W.M. DES VEUX's exhaustive despatch of 31st October, 1889, to Lord KNUTSFORD, then Her Majesty's Principal Secretary of State for the Colonies.
In that despatch our late Governor was able to refer to the great wealth of the Colony, to the increased market value of the shares in all registered Companies in Hongkong, to the enormous rise in the value of land, and to the certainty of a further increase therein, leading to a great enhancement of revenue from land sales, crown rents, and an increased volume of taxation, and to a vast commerce in a healthy state of progress, etc., etc.
A proposal was made at that time and most cordially supported, not only by the then Unofficial Members of Council but by the community generally, to improve the pay of the Civil Servants, compensating them in some way for the then rise in the cost of living in the Colony generally, but more especially in the item of house rent. The value of land in the Colony at that time was indeed very great, and rents were higher than they had ever been before. Early in 1889 a Commission, composed entirely of Unofficial Members of Council (the Chairman only excepted), recommended a general advance in salaries all round. The then Secretary of State for the Colonies approved of the recommendations with various alterations and modifications and after prolonged consideration and discussion in despatches and in Council a revised scale was approved and introduced into the Estimates for 1891.
But, during the two years that had elapsed since the first proposals were made, great changes had taken place in the financial condition of the Colony. In his speech in the Council, on 19th March, 1891, Sir G.W. DES VEUX forcibly pointed out that the Colony was suffering largely from three causes which had hit Hongkong extremely hard—one was the restrictive legislation against Chinese in the Australasian Colonies and in America; another was the increased cultivation of the Poppy in China, which had diminished our Opium Imports; and the third was the decline in the export of Chinese Tea owing to the competition of India and Ceylon.
Land had fallen greatly in value; we were largely over-built in the City of Victoria, at the Peak, Magazine Gap, and at Kowloon; house rents were going down considerably in almost all instances; immense sums of money had been lost through unprofitable trade in tobacco planting in British North Borneo, mining ventures in the Malay Peninsula and elsewhere, and a number of the new local enterprises had not yet yielded any return on capital invested, while many others were in course of liquidation; the unprecedentedly violent fluctuations in the gold value of silver had paralyzed and rendered Export and Import trade not only unprofitable but disastrously bad, resulting in heavy losses, and the Colony's revenue showed every symptom of a serious falling off, more particularly the revenue derivable from the Government's Opium Farm, which was at that period about one fourth of the Colony's total income.
This state of affairs was aggravated by the Military Contribution to the Imperial Government from the Colony being increased from £20,000 to £40,000 per annum, or to nearly one sixth of our total annual revenue, on the ground that an increased Garrison was essential. Under these circumstances, and while the proposed increase in salaries was under consideration of the Secretary of State for final approval, the Unofficial Members of Council by telegram and by letter entreated his Lordship in the then generally unsatisfactory condition of the Colony to withhold his sanction from the proposed increase, and allow the whole matter to stand over until it was seen whether the Colony could or would recover from its then state of financial and general depression.
The payment of the enhanced rates of salary in the Colony was actually suspended for nearly six months pending the result of this appeal to the Secretary of State, and the Civil Servants were expressly warned by the Governor that if payment was made it would be only for the year, and that the whole question of salaries was open for reconsideration and revision in the next and following annual Estimates. Lord KNUTSFORD finally directed the payment for 1891 of the increased rates of salary, on the allegations that house rent for Europeans had increased from 100 to 150 per cent., and for Chinese 100 per cent. Distinct official caution was given to the officers concerned that it was not to be looked upon as a permanent increase, but as an increase that was open to reconsideration and reduction in the next or any following year, if there was no improvement in the financial condition of the Colony.
This being a brief history of the question of the increase in official salaries, can it be maintained, as it has been, that the Civil Servants have a vested interest in these increased salaries and that the Unofficial Members are guilty of a grossly inequitable attack on vested interests in moving now for the reduction of these salaries to their former level? We submit that it cannot be so maintained. The power to re-examine and re-adjust them if necessary was specially reserved, and the recipients were officially cautioned that they were not to look upon the increased salaries paid in 1891 as a permanent improvement.
Is there any justification now for the present endeavour to reduce the increased salaries to the 1890 level?
The three causes, referred to by Sir G.W. DES VEUX, viz., restrictive legislation against Chinese in Australasia and America; the increased cultivation of the Poppy in China, which diminishes our Opium Imports; and the decline in the Export of Chinese Tea, owing to the competition of India and Ceylon, are still causing the Colony to suffer more largely and more severely than before, and whether any improvement can be looked for in the immediate future is extremely doubtful.
Land has not improved in value; it is lower now than it has been for a number of years; and Land Sales have fallen off. It is improbable that the value of Land will improve for some time to come, as we are already largely over-built generally throughout the Colony, and the Reclamation of new land, along the Praya central westwards from the sea, will be available for building purposes sooner or later.
Is the general trade of the Colony either amongst Chinese or Europeans profitable or even satisfactory? Undoubtedly not. Trade is bad, and has been for the last two years, probably worse than at any time in the Colony's history. There has been, unfortunately, continued general commercial and financial depression, apprehension, anxiety, and suspense; there is a general want of confidence, credit is seriously contracted, and several of the most respectable and oldest established of our mercantile houses have, under the strain of continuous heavy trade losses, collapsed, while the violent fluctuations in Exchange and the unprecedented decline in the gold value of silver have been the chief factor in bringing about the fall of the oldest Exchange Bank in the East, as well as largely contributing to the collapse of another Banking Institution whose Banking Assets recently were upwards of Ten and Three-quarters Millions of Pounds Sterling.
The trade of the adjoining Province, Kwangtung (Canton), has not shewn any increase in the first nine months of 1892 as compared with the corresponding period of 1891; on the contrary, the Chinese Customs Revenue shews a decrease of almost ten per cent., or over Taels 415,000. The published Returns of the Chinese Imperial Maritime Customs give:---
Revenue for the first nine months of 1891Taels 4,244,994.24 Revenue for the first nine months of 18923,829,906.57The decrease for the first three-quarters of 1892 as compared with the same period of 1891, at Canton being over 5%, at Lappa (Macao) over 15%, and at Chinese Kowloon over 20%. The Chinese Customs Revenue may safely be regarded as an index to the variations in trade, and even the decreased volume thereof, for the reasons before mentioned, has in many instances resulted unprofitably. Trade cannot improve while the gold value of silver continues shrouded in boundless uncertainty and violent fluctuations in Exchange are taking place.
Returns may shew some increase in the tonnage of shipping frequenting the harbour, but it is notorious in the Colony that a number of the steamers calling here have not been paying their running expenses, while nearly all have suffered pecuniarily in sympathy with the exceedingly unsatisfactory state of shipping all...